Net capital outflows from U.S. commodity exchange traded funds (ETFs) rose to a record $857 million in 2015. ETFs witnessed a sharp fall in assets of 26% as raw materials plummeted to a 16 year low.
In the meantime, energy-linked ETFs were the only group to see net capital inflows even despite plunging oil and gas prices.
Hedge funds in their turn are on track to extend losses on the back of further depreciation of gold, copper, corn, and natural gas. Investors are getting away from the commodities market as it is no longer rising amid China’s demand for agricultural products, metals and fuel.
Alan Gayle, Senior Investment Strategist at RidgeWorth Investments, believes that keeping away from the commodities market in 2015 has worked. “We’ve got a combination of softer demand and excess supply. And until we see signs of either of those issues turning around, then we’re staying on the sidelines,” he said.
The Bloomberg Commodity Index that tracks 22 raw materials tumbled 25% in 2015, a 5th straight annual loss and the longest slide since the data was first recorded in 1991.
